Greenland’s Rare Earths: A Geopolitical Chessboard
The Tanbreez Mining Greenland project, one of the largest known rare earth deposits in the world, has been thrust into the spotlight amidst growing global concerns over rare earths supply chains and strategic resources. The deposit, located in Greenland, is estimated to contain around 4.7 billion metric tons of multiple rare earth resources, a substantial reserve that holds immense potential for industrial, military, and technological applications. This vast quantity of minerals makes it one of the key players in the global race for rare earths, a critical commodity that is essential for numerous high-tech industries.
What Are Rare Earth Elements and Why Are They So Crucial?
Rare earth elements are a group of 17 chemical elements that are vital to a wide array of modern technologies, particularly those related to electronics, energy, and defense. These elements are not necessarily rare in the Earth's crust, but their concentration in easily accessible deposits is scarce. The applications for rare earth elements are diverse, spanning from consumer electronics like smartphones, laptops, and televisions, to energy-efficient technologies such as wind turbines and electric vehicles (EVs), and even to advanced military systems like radar, sonar, and missile guidance.
The specific rare earth elements in the Tanbreez deposit include neodymium, praseodymium, dysprosium, and terbium, among others. These elements are primarily used in the production of high-strength magnets, batteries, catalysts, and phosphors, all of which are essential for clean energy solutions, advanced electronics, and military technologies.
• Neodymium and praseodymium are crucial in the production of powerful permanent magnets used in electric vehicle motors and wind turbines.
• Dysprosium and terbium are used to enhance the performance of neodymium-based magnets, making them heat-resistant, which is essential for their use in high-performance motors and electronics.
These applications have made rare earths indispensable to the modern technological landscape, and as countries around the world strive for a cleaner energy future and stronger defense capabilities, access to these resources is increasingly viewed as a matter of national security.
The Diplomatic Pressure and Sale of Tanbreez Project
The rare earths market has long been dominated by China, which controls more than 80% of global rare earth production and processing. This dominance has raised concerns in Western nations about their dependency on China for these critical materials. As such, the US and Denmark have been increasingly focused on securing alternative sources of rare earths to mitigate the risks associated with such a heavy reliance on a single country.
In response to growing strategic interest in Greenland’s mineral wealth, the US and Danish governments reportedly lobbied Tanbreez Mining Greenland to avoid selling its significant stake in the Tanbreez deposit to Chinese-controlled companies. These efforts were driven by geopolitical concerns, particularly with the potential risks of Chinese control over a resource deemed vital for both energy and defense sectors in the West.
Despite higher offers from Chinese bidders, Tanbreez ultimately sold 92.5% of the project to Critical Metals Corp for $211 million, securing both CRML shares and $5 million in cash. This transaction took place in June 2024, with the remaining 7.5% of the project retained by European Lithium, an Australian-listed company that had already been invested in the project.
Critical Metals Corp was created through a merger between European Lithium and the special purpose acquisition company Sizzle Acquisition Corp. As a company listed on the Nasdaq, CRML represents a strategic alternative to Chinese control. The decision to sell the majority of the stake to CRML underscores the efforts by Western companies and governments to keep critical resources like rare earths within their own spheres of influence, particularly as global tensions regarding trade and technology intensify.
The Strategic Importance of the Tanbreez Project
Tanbreez’s Greenland project is set to produce 500,000 metric tons of rare earths annually, a significant contribution to global supply. This output could potentially reduce Western nations’ reliance on China and help foster a more diverse and secure rare earth supply chain. As of 2024, the project was still in its developmental stage, with first production expected in 2025.
The geopolitical value of Greenland’s mineral wealth extends far beyond rare earths. The island, which is an autonomous territory of Denmark, has long been considered strategically important due to its location within the Arctic region. With increasing interest in the Arctic's untapped resources, Greenland’s position has gained significance in the context of global energy security and defense strategy. The US, in particular, has shown an interest in Greenland as part of its broader strategy to counter Russian and Chinese influence in the region.
Greenland’s natural resource wealth, including rare earths, is viewed as an asset not only for Denmark but also for NATO, with its potential to strengthen supply chains and reduce the reliance on adversaries for critical materials.
Rare Earth Supply Chain and the Changing Global Landscape
The global rare earths market is currently dominated by Chinese companies, but there is an ongoing shift toward diversifying the supply chain. In addition to Greenland’s rare earths, other regions, such as Africa, Australia, and the US, are actively exploring or expanding their rare earth production capabilities.
For example, Australia is home to some of the world’s largest rare earths reserves and is a significant exporter of these minerals. Similarly, the US has been working to increase domestic production, with companies like MP Materials developing rare earths mines in California. Critical Metals Corp aims to contribute to this diversification by focusing on North American supply, as evidenced by its ongoing discussions with major defense contractors like Lockheed Martin, RTX, and Boeing to secure supply agreements. The company has also expressed plans to build a rare earth processing plant in the US, further ensuring the minerals are processed domestically, rather than relying on China for this critical step in the supply chain.
The US and its allies are also making efforts to create a more resilient and secure supply chain by establishing partnerships with countries rich in rare earths reserves, such as Australia and Canada, to reduce the risk of geopolitical disruptions.
The Bigger Picture: Greenland’s Role in Global Strategy
The Tanbreez project is more than just a mining operation; it is a key component of the broader geopolitical struggle for control over critical resources. With the global demand for rare earths growing due to their applications in clean energy, defense technologies, and consumer electronics, countries are increasingly viewing access to these resources as a national security priority.
The decision by Critical Metals Corp to acquire the majority of the Tanbreez project marks a significant shift in the rare earths landscape, one that signals Western efforts to regain control over the supply chain and reduce dependence on Chinese dominance. However, the situation remains fluid, with global politics, economic pressures, and technological advancements continuing to shape the rare earths market.
As the US, Denmark, and other countries look to Greenland's resources to bolster their strategic reserves, the island’s rare earths deposits are likely to remain a focal point of international diplomacy, trade negotiations, and security concerns.
